Treasury dealt blow after MPs decline to consolidate three funds

Members of Parliament have rejected plans by the National Treasury to consolidate three multi-billion shillings funds into one kitty known as Biashara Kenya Fund.

The legislators adopted the Report on Annulment of the Public Finance Management Biashara Kenya Fund regulations of 2021 by the Committee on Delegated Legislation which sought to revoke operationalization of Women Enterprise Fund, Uwezo Fund, Youth Enterprise Development Fund in order to create one fund, the Biashara Kenya Fund.

The William Kamket led-committee annulled in its entirety the Biashara Kenya Fund Regulations 2021 which was prepared by the National Treasury Cabinet Secretary Ukur Yatani and tabled in Parliament on May 13, 2021.

Yatani had sought parliament approval in collapsing the three multi-billion shillings funds into one kitty in order to cater for all disadvantaged groups through affirmative action as prescribed in Article 27, 55 b and c and 56 b and c of the Constitution.

Treasury drafted the regulations on the backdrop of a Presidential Taskforce on Parastatal Reforms Report of 2014 which had also recommended the merger of the three funds.

Treasury had proposed an initial capital of Kshs. 2.3 billion appropriated by the National Assembly to create Biashara Kenya Fund.

In their meetings with the CS Yatani the Committee rejected proposals requiring that disbursement of the funds be done through financial intermediaries such as banks and microfinance institutions.

“The Committee noted that the new regulations seek to deliberately revoke the role of the Member of Parliament and other political offices involved during the disbursement of funds for purposes of oversight and monitoring,” said Kamket.

According to Uwezo Fund, since establishment in 2014, it has disbursed loans amounting to Kshs. 6.95 billion to 1,088,757 beneficiaries of which 69% are female and 31% male.

YEDF on the other hand has disbursed loans amounting to Kshs. 4 billion since establishment.

Legislators also argued that Treasury had not subjected the regulations to public participation especially among groups that that the affirmative action funds had targeted.

“We also realized that there was minimal public participation. The only body that they quoted as having consulted was the committee on delegated legislation and Mr. Speaker these are funds that will impact many Kenyans; women, the youth, persons with disabilities and they didn’t care,” argued Charles Njagagua who is the Vice Chair of Delegated Legislation.

MPs rejected the proposal to have Biashara Kenya Fund run through banks saying it would lock out the disadvantaged groups which the fund is trying to assist.

Treasury had said that running of the funds independently had become costly hence their amalgamation was necessary.

“The desire to merge them and reduce the administrative costs is real and is acceptable but even if you reduce that and you don’t’ achieve the objective for which they were started, which is affirmative action for these people who are otherwise have not been bankable so to speak, the you lose out on all that,” added Dr James Nyika, MP Seme.